Historic homeownership rehabilitation credit
You're entitled to claim this credit if you:

• rehabilitate a qualified historic home in New York State, or
• purchase a rehabilitated qualified historic home in New York State.

A qualified historic home must be an owner-occupied residential structure (including a condominium or cooperative) listed on the State or National Register of Historic Places, or located in a state or national registered historic district and certified as being of historic significance to the district. The home must also be located in:

• a federal qualified census tract or area of chronic economic distress, or
• a census tract that is at 100% or below the state family median income level.

The New York State Office of Parks, Recreation, and Historic Preservation can help determine whether a building meets these requirements.
To qualify for the credit:

• You must own and reside in the historic home in New York State in the year for which you claim the credit.
• Qualifying rehabilitation costs for the project must be $5,000 or more.
• You must receive preliminary approval and a Certificate of Completion from the New York State Office of Parks, Recreation, and Historic Preservation.

You may also qualify for the credit if you purchased a qualified historic home and meet certain conditions.
How much is the credit?
The historic homeownership rehabilitation credit is equal to 20% of the qualified rehabilitation expenditures. The credit cannot exceed $50,000 per taxpayer per year. A husband and wife who are both eligible to claim the credit may each claim up to $50,000, whether they file joint or separate returns.

• If your New York adjusted gross income for the tax year is $60,000 or less and your credit is more than the tax you owe, the excess credit is refundable.
• If your New York adjusted gross income for the tax year is more than $60,000 and your credit is more than the tax you owe, the credit isn't refundable. However, you may carry over any excess credit to the following year or years.

For additional information on claiming this credit, see Form IT-237, Claim for Historic Homeownership Rehabilitation Credit, and its instructions, Form IT-237-I.

The Federal Historic Tax Credit may be able to help!

American Brewery Building, Baltimore MD

Utilizing the federal HTC is essentially a three-step process governed by regulations and procedures of the National Park Service (NPS) and the Internal Revenue Service (IRS):

1. QUALIFYING: The owner determines whether the project will qualify for the 10 percent or the 20 percent tax credit based on IRS and NPS qualification criteria;
2. EARNING: The owner follows the procedure established by the NPS to earn the credits;
3. REDEEMING: The owner consults IRS regulations to determine his/her ability to redeem the credits earned as a credit against federal tax liability.

Using the three-step process outlined above, this guide will traverse the often confusing web of federal regulations, helping to answer questions such as:

• Does my project qualify for the 10 percent historic tax credit or  the 20 percent historic tax credit?
• Does my planned rehabilitation satisfy the qualification criteria established by the IRS and NPS?
• How much of my earned credit will the IRS regulations allow me to redeem?
• Can I “sell” my credits to investors who can apply them to reduce their federal tax liability?

borrowed from
 http://ntcic.webfactional.com/tax-credit-basics/historic-tax-credit-guide/

Federal 20 and 10 Percent Historic Tax Credits

How to Use HistoricTax Credits

To qualify for either the 20 percent or the 10 percent historic tax credit, the rehabilitation must be “substantial”. A substantial rehabilitation means that a taxpayer’s QREs during a 24-month or 60-month measuring period (for a phased project) must exceed the “adjusted basis” of the building or $5,000, whichever is greater. The adjusted basis is generally defined as the purchase price, minus the cost of the land, plus the value of any capital improvements made since the building acquisition, minus any depreciation already taken. Eligible properties must be income-producing to qualify for historic tax credits; therefore, owner-occupied residences are not eligible.
To qualify for the 20 percent credit, the rehabilitation must also be certified as conforming to the Secretary’s Standards for Historic Rehabilitation. This certification is achieved by completing a three-part application process which is reviewed first by the state historic preservation office (SHPO) and then by the National Park Service (NPS).

• Part 1 makes the case for National Register property listing or verifies that a property is a contributing structure in a National Register District;
• Part 2 summarizes the scope of the rehabilitation; and
• Part 3 documents that the work has been done as proposed in the approved Part 2.

Virtually all of the rules that apply to the 20 percent historic credit apply to the 10 percent credit with a few notable exceptions. The 10 percent credit requires no design review at the state or federal level, but there is a “wall test” requiring that three of the original four exterior walls remain intact. If this property is located within a historic district, the Part 1 application must be filed and approved by the National Park Service to confirm its non-contributing status. To redeem the 10 percent credit, the developer simply needs to attach Form 3468 to his/her tax return.
The compliance and recapture period for the federal historic credits is five years from the date the property is placed in service. Twenty percent of the recapture risk burns off every year.

How Nonprofit Groups Can Use Tax Credits

Nonprofit organizations and public agencies do not pay federal or state income taxes and therefore have no tax liability against which to apply historic tax credits. Also, many for-profit entities are not in a tax position to make full use of the value of the credit. Fortunately, in these instances, it is still possible to tap into the value of the historic tax credit by transferring (or ‘syndicating’) the tax credit to a corporate investor, or in certain instances, individuals, who then use the tax credit to offset some of their own tax liability.

 quoted from
 http://ntcic.webfactional.com/tax-credit-basics/federal-tax-credit-basics/utilization/